ICP was one of the most promising crypto projects, with a vibrant community. Currently trading at $4.009 per coin, getting to all-time high of $2,826 will be 709x the current price. Can this ever happen?
In this episode of #CryptoForensics I'll cover:
What happened to ICP before and after launch?
How the ICP and Dfinity teams sold billions of dollars in tokens
Details about the $ICP tokenomics
The possible future of ICP
Let's dive in!
The Promise Of A New "Internet"
After waiting for over 4 years, Internet Computer launched its $ICP token. The price went to an all-time high of $2,826 that day, before dropping to a low of $375. Ever since then, the ICP price has been on a downward spiral, reaching an all-time low of $3.4 in December 2022.
The idea of ICP was to have an 'internet computer" that would replace not just Web2, but also Bitcoin and Ethereum. They called themselves the "NASA for decentralization," powered by the ICP token.
Two years after the token launch, the technology is still in the development phase. And you can tell how disinterested people are in ICP with the TVL it has at just $2.63 million, according to data from DeFi Llama.
Predatory Tokenomics And Team Dumping Billions Of Dollars
Below are the details of the ICP tokenomics according to data from Messari.
In a seed round in 2017, the team raised $3.9 million from 370 investors. All of their 115,986,694 tokens were released monthly from the day the token launched. They paid $0.03 per ICP in the round, and these people made between 12,000 and 50,000x on their investment after four years!
For context, a person who invested $10,000 would have made $120,000!
Arkham, which launched its $ARKM token on Binance, revealed in a report that the ICP team dumped billions of dollars on the market after launch.
“Our analysis has led us to believe that possible insiders connected to Dfinity have been dumping billions of dollars of ICP on exchanges at the expense of small early supporters and retail investors.” - Arkham
When the ICP team was asked about the investors' tokens being unlocked, they confirmed it in a tweet (Xeet), as you can see in the image below.
Following Arkham's report that the Dfinity team was selling $ICP tokens, Dominic Williams, the founder of Dfinity, confirmed in a tweet that 23.8% of the tokens were not locked, as seen in the image below.
Arkham's report revealed that they transferred 18 million ICP tokens worth $3.6 billion to exchanges from its treasury in May and June of 2021. This was aside from the team tokens, which comprised 18% of the total supply worth $31 billion at TGE, reserved for only 200 people.
What did the community get? 0.8% of the supply is to be shared by several thousand. And if you ever wondered why almost no one is building on ICP, that is because only a meager 0.48% of the token supply is reserved as incentives for developers. This is less than $10 million at the current price, while the team sold billions.
What Does The Future Hold For ICP?
This is crypto, after all, so it's hard to be accurate. We often forget things very quickly. But we won't forget what ICP (Dfinity) and its team did. For the following reasons, I am of the opinion that ICP will slowly fade away, just like Elastos ad projects with similar business models faded away.
The idea of having everyone in the world using their "internet" is unrealistic
The team selling billions of dollars of tokens is a lack of confidence in what they are building
With no incentives for developers, no one will build on the chain
The world is a better place without ICP and its drama
ICP price may yet go up when the next bull run starts. Before you invest more than you can afford to lose, remember that the team still has tokens to sell, and some investors still hold tokens that are still up 130x, even though the ICP price has dropped 99.8 percent!
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This article is for educational and entertainment purposes only, not financial advice.
